The Technical Jargon Every Tenant Needs to Know

Looking for the perfect place to rent can be exciting, and when you finally find that dream property, it is easy to get swept away and ignore all the foreign-sounding technical terms. You can get lost in the legal mumbo-jumbo, but it is important to know what these terms mean if you hope to understand your rights, and what you are agreeing to.

Rental contracts and tenancy agreements are rife with technical jargon, which may leave you confused, and perhaps even blindsided if you were not familiar with what you signed. Even agents sometimes speak in strange terms unfamiliar to you, without realising it. You might feel too embarrassed to admit that you don't know what they are talking about, and end up with a bad deal.

We will have a look at some of the more commonly used phrases from A to Z, that you can familiarise with.

Arrears – This simply means that your rent is overdue or outstanding, either in part or in full.

AST (Assured Shorthold Tenancy) – It is the most common form of a tenancy agreement that stipulates all the details and terms of the occupancy and the duration. Read this document carefully, and keep it as a reference to remind yourself of your tenancy rights. Once it is signed, you can move into your new home.

Banker's Draft – Cheques might be outdated, but in some cases, the landlord will prefer a bank draft to settle the deposit and the first month's rent. A bank draft cannot bounce due to lack of funds in the account – you pay the bank, and the bank will issue a cheque to the same value.

Break Clause – A break clause is common in fixed-term tenancy agreements where the tenant signed a contract for a fixed term of a year or more. This clause is a provision that allows either you or the landlord to end the tenancy before the expiration date, with no notice. While a break clause offers you the freedom to move at the drop of a hat, it also leaves you with little security over your occupation.

Build-To-Rent – These are homes built exclusively for renters with a specific lifestyle in mind. You will be dealing with an operator of the building, instead of a traditional landlord.

Buy-To-Let – The landlord bought the property with the specific intention to rent it out. It was not their primary home.

Check-In/Check-Out – When you move into a new property, the agent or landlord will perform a check-in, similar to a hotel, but more involved. They will point out everything you need to know about your new home, and take inventory. Check-out, as you may have guessed, takes place at the end of the tenancy when a check-out inspection is performed before you hand over the keys. The condition of the property is compared to the original inventory checklist. When you check-in and out, it is always advisable to take photos as evidence of the condition of the property, to avoid disputes later on.

CMP (Client Money Protection Insurance) - CMP is a plan to protect the rental money that you pay to a letting agent, who should in turn pay the landlord. It is a type of insurance that protects all parties, should the agent try to keep the funds for themselves.

Council Tax – It is a compulsory tax payable in England, Wales, and Scotland, and the duty generally falls to the tenant to register and pay for council tax.

Covenants – The terms stipulated in your rental agreement are referred to as the covenants. Essentially, it is a promise that you and the landlord make to each other in respect of certain rules and rights.

Credit Search References – Often, prospective landlords or agents will conduct a credit search online to verify your financial position and past credit records. This will indicate whether you have historically paid your bills on time, and so on. In addition to the credit check, they may also run a criminal history check and a reference check from someone like your employer or past landlord.

Deposits – There are two types of deposits; a holding deposit and a security deposit. The holding deposit is generally equivalent to a week's rent to reserve the property and is non-refundable if you withdraw from the contract, otherwise, it will be deducted from the first month's rent. A security deposit is generally equivalent to six weeks rent (though it can differ from landlord to landlord) and acts as a safeguard against unpaid rent or damages to the property. If you were a model tenant, the full deposit will be refunded to you at the end of the tenancy.

Dilapidations – Items that have been damaged by the tenant over and above the normal expected wear and tear.

EPC (Energy Performance Certificate) - It is a standard requirement for all rental properties to have an EPC, that gives a rating of the property's energy efficiency. The property needs to be rated "E" or higher.

Fixtures & Fittings – These include items that were provided by the landlord at the start of the tenancy, especially in "furnished" properties. It can include everything from sofas and carpets to light fittings.

GSR (Gas Safety Regulations) – It is another compulsory document that verifies that all gas appliances are functioning correctly, and safely. The certificate needs to be renewed every 12 months. You as the tenant should also receive a copy.

Grounds for Possession – Any reason the tenant has to apply to the court to repossess the property in the event of damages, or if the rent is too far in arrears.

Guarantor – This is someone willing to sign the tenancy agreement on your behalf, and who is willing to step up if you can't pay your rent. In essence, the guarantee that they will take responsibility for the agreement.

HMO (House in Multiple Occupation) – The property is an HMO if a minimum of three tenants forms more than one household, but there are shared amenities. All large HMO's must be licenced by the local council.

Inventory – Similar to "fixtures and fittings", inventory is an extensive list of the overall condition of the property, including all content, and the garden. An inventory list is used to compare the state of the property pre-and post-occupancy.

Liability – If more than one adult is residing on the premises, the tenancy agreement will indicate "joint and severally" liability. Any one person will then be liable for the responsibility to maintain the contract, even if other tenants forfeit.

Notice Period – Either the landlord or tenant can end the agreement by providing a notice period unless otherwise stipulated.

Periodic Tenancy – Tenancy continues per period until notice is given. When an AST ends, for example, it will revert to a periodic tenancy by default.

PCM – It indicates the amount of rent payable per calendar month.

Prescribed Information – The landlord (or lessor) must be transparent about the deposit protection scheme and any information relating to the agreement and must provide this information to the tenant.

Statutory Obligations – These are legal requirements and obligations that are governed by Acts of Parliament that both landlords and agents must adhere to.

Sublet – When you let out all or part of the property to someone else who is not mentioned in the rental agreement, you are subletting. It is generally frowned upon, and you will need permission from the landlord first, or face potential legal action.

Zero Deposit Scheme – It replaces the more traditional security deposit to help tenants who can't pay the full security deposit before moving in. Instead of paying the standard equivalent of 6 weeks rent, tenants now only pay a non-refundable fee equivalent of a week's rent and a small annual fee.